Wednesday, September 13, 2006

TOP STORY >>HUD probe sees widespread mismanagement

By PEG KENYONLeader staff writer

The former director of the Jacksonville Housing Authority admitted to fraud in a report The Leader obtained from the U.S. Department of Housing and Urban Development. The report outlines findings of a federal audit of the agency earlier this year. The Jacksonville Housing Authority, which oversees the Max Howell Place apartment complex and disbursement of rent vouchers, caught the attention of the Department of Housing and Urban Development.

Executive director Virginia Simmons resigned from her JHA post shortly after the audit. She had been executive director for 14 years. The report also said the agency had concerns over lack of security and a lack of response to what should have been emergency work orders. In mid-June the federal agency asked for contracts and work orders for more than $132,000 spent by the housing authority. HUD officials wanted to scrutinize all contracts and purchase orders and asked that they be pulled and available for June 28. On June 27, a JHA employee informed HUD that Simmons had directed her to create four contracts and to call contractors to come to the office and sign the contracts.

THE REVIEW

On the same day, Simmons “admitted to Mr. Jesse Westover, Public Housing director, Little Rock Field Office, that she had falsely reported program obligation under the FY 2003 Capital Fund Program on Sept. 15, 2005 in the amount of $132,788.11,” according to the HUD review document. HUD officials concluded that these actions were taken in an attempt on the part of the then JHA executive director to document evidence to support contracts had legitimately been entered into before the obligation end date of Sept. 16, 2005.

The review also alleges that the local housing authority “did not properly advertise for bids in excess of $25,000” or adequately keep documentation of solicitations. Those deficiencies may require further investigation, according to HUD officials. Jacksonville Mayor Tommy Swaim, who received a copy of the HUD review, cites this as one of the two biggest issues facing the JHA. “They’re still investigating and there could be ramifications over this,” Swaim said. Mismanagement was a problem, he said. While looking over the work order log at JHA, the HUD review’s team noticed there were no work orders listed as being an “emergency.” The team found this unusually “rare” for a housing authority of this size.

The review claims that a work order denoting “‘tenant smells gas’” should have been listed as an emergency work order. The conclusion would be that the JHA should determine what should be classified as emergency work orders.

MEMBERS RESIGN

Coinciding with the HUD review, three members — Ferrell Gray, Robert Colford and Robert Whatley — of the JHA Board of Commissioners followed in Simmons’ footsteps and also resigned. A fourth member, Johnny Moory, had previously resigned due to an illness in the family. The sole remaining commissioner, Fred West, is now hospitalized, according to one of the employees at his State Farm Insurance firm.

Under the Freedom of Information Act, The Leader received the HUD document with the outcome of the review, which was conducted by Corey Grant, public housing revitalization specialist; Johnny Wooley, facilities management specialist; and Sandra King financial analyst. A letter to Mary Boyd, interim executive director for JHA, requested a written response detailing actions taken or planned to address “concerns” contained in the report.

Boyd was not available for comment because she had left to attend training from the state’s National Association of Housing and Redevelopment Officials organization, according to Barbara Boyd, deputy director at JHA. On Tuesday afternoon, Barbara Boyd said the HUD review was a surprise to her. “We haven’t seen this at all,” she said.

Boyd explained that she was also getting ready to leave for training at the state’s chapter of NAHRA. She said the review would be sent to the interim executive director of the JHA..

SPECIAL REQUEST

With the paperwork obtained through the FOI request is a letter to Mary Boyd, the interim director, requesting a written response detailing actions taken or planned to address “concerns” contained in the review. Those concerns focused on recaptured funds of $23,780 from a fiscal year 2001 program and $5,430 from a fiscal year 2002 program “due to poor program implementation,” according to the document’s summary.

It reads, “The JHA has had problems in the past in regards to documenting and reported to HUD the obligations and expenditures for their CFP (capital funding).” This led to more concerns by HUD dealing with obligations and expenditures for the fiscal year of 2003 because Simmons “waited until one day prior to the program obligations end date to report to funding obligations.…” The amount figure was listed as $132,788. 11. The document noted no disbursements on the obligations until four months later. The review referred to this action as being “odd due to the small amounts” disbursed on the large obligation amount.

Based on past concerns, Jesse Westover, director of the Office of Public Housing, at a June 19 meeting asked Simmons if the JHA had “documentation, executed contracts and/or purchase orders” regarding the $132,788.11. Simmons claimed all the funds reported on Sept. 15, 2005 were either under a contract and/or purchase orders. It was shortly after this that Simmons asked JHA employees for backdated contracts to be drawn up, according to the report.

DISCREPANCIES

In day-to-day operations of the JHA, a HUD review team pointed out possible flaws ranging from personnel policy having not been properly followed to a security officer allegedly seldom seen on the premises. “The security officer is paid a set salary bi-weekly whether he reviews background reports or not,” the document states. The security officer is “not” providing a weekly report of services performed and the review team noted seeing “several messages” between three to 10 days old” left for him by applicants, according to the document.

Employees reported that the security officer is only seen in the office when he signs his time sheets and picks up his paycheck. Additionally, the local housing authority accepts cash for rent payments. “Even though the money is deposited on a daily basis, there is no safeguard over cash nor is rent being collected in a safe secured area,” per HUD Handbook 7511.1, Chapter 3, Section 1. The review indicates that JHA’s personnel policy needs to be revised, adopted by the Board of Commissioners, and then “fully” implemented.

The review uncovered that a maintenance employee was suspended for 10 days without pay but the personnel policy allows for a maximum of seven days without pay. The JHA Board of Commissioners was made aware of the situation and the employee was able to return to work and was being paid for the time off, according to the review team. An independent audit report for 2005 contained one finding for the Housing Choice Voucher Program. The finding was, “Four of the 35 tenant files reviewed lacked adequate documentation.” A similar finding was discovered in 2004.